INAFI NEPAL

INAFI NEPAL, SAP-Bhawan,Babar Mahal
Kathmandu, Nepal,
GPO Box: 3827, Kathmandu
Tel. 977-1-4223230, 4258782
Fax: 977-1-4241338
Email: inafinepal@sapnepal.org.np
 

Introduction

The history of microfinance in Nepal is relatively new and the government's attempt to promote microfinance services dates back to 1975. It was recognized as an official poverty alleviation program only in the country’s sixth plan (1980/81-1984/85). It however gained momentum after the restoration of democracy in 1991.

Microfinance is often seen as an effective strategy for extending financial services to the poor and other disadvantaged groups not reached by the formal finance sector. Despite its tremendous potential to alleviate human poverty, only 33% of households below the poverty line have access to it. There is even a greater need to expand microfinance services in the high hills and mountains.

Nepal has a wide range of active microfinance institutions that provide financial services to the poor in their own way. These institutions are regulated by government acts such as:

• The Bank and Financial Institution Ordinance (2004)

• The Cooperative Act (1991)

• The Financial Intermediary Act (1998)

Within the available legal and regulatory framework and actively involved in the microfinance sector are:

• Four Microfinance Development Banks

• Five Grameen Bikas Banks

• Over 1800 Savings and Credit Cooperatives

• Over 200 Small Farmers Cooperatives

• Over 44 Financial Intermediary NGOs

Three categories of second tier refinance institutions have been established to provide wholesale loans to different MFIs in Nepal such as:

• The Rural Self-Reliance Fund

• The Rural Microfinance Development Center

• The Sana Kisan Bikas Bank (Small Farmers Development Bank).

INAFI Nepal has been established as a network organization of microfinance practitioners and promoters to strengthen the microfinance sector in Nepal.

INAFI Nepal Member Organizations:

At present, the following are the member organization of INAFI Nepal:

Major action INAFI Nepal

One of the major interventions of INAFI is Capacity building, which has been used to enhance the managerial capacity of its member organizations. With this intervention member organizations were expected to be better able to plan and manage their growth, manage operational and credit risks, track and monitor the impact of their services on poverty, attract and retain clients and adopt regional standards and benchmarks in managing their growth. Another intervention of INAFI is research and documentation of issue-based case studies and the dissemination of the findings to the stakeholders of micro finance. Advocacy and Communication is also another main activity of INAFI Nepal. INAFI Nepal is facilitating and organizing round table discussions, dialogues and workshops in order to lobby and advocate policy changes in microfinance institutions. Since member organizations of INAFI may need to improve their delivery of services to the community, member service has become an important intervention to formulate a standard policy to change present practices. Product development is another intervention that intends to make member organizations able to design/develop appropriate financial products and services that attract more women and poor clients.

Major Activities:

Sustainability of microfinance program

Microfinance means building financial systems that serve the poor. Microfinance services are possible only when microfinance institutions manage their activities in a sustainable way. Sustainability is necessary to reach a significant number of the poor people. Building sustainable financial systems for the poor means building sound domestic financial intermediaries that can provide financial services to poor people on a permanent basis. The financial sustainability of microfinance programs is not only necessary in order to reach a large number of poor clients but it has also been recognized as an integral part of the financial sector and sustainable business.

INAFI Nepal's activities towards sustainability focus on:

• Highlight the importance of self-sustainability of the microfinance program.

• Enhance the managerial capacity of microfinance institutions to achieve self-sustainability with quality outreach

• Share and discuss different ways for operational and financial self-sustainability of the MF program

Recent Activities:

• Workshops on 'sustainability of microfinance program in Nepal'.

• Sustainability related topics (sessions) included in the training package.

Microfinance training

Knowledge on the basic principles of microfinance is necessary to increase public awareness and an understanding of microfinance. It has been realized that the MFIs and other stakeholders should understand various dimensions of micro finance and to improve their delivery systems. INAFI Nepal assists to strengthen the capacity of Microfinance institutions through need based training package.

INAFI Nepal's training towards capacity building focus on the following:

• Internalize the basic concepts/principles, issues, raise awareness, and develop various methodologies to provide efficient client friendly microfinance services to the poor.

• Plan to enhance the inclusion of disadvantaged group including women in their program.

• Operational and financial management of MFIs.

• Suitable business plan for MFIs.

Recent Activities:

• Training on Theory and Practices of Microfinance Operations held on January 24-28, 2005

Thematic research study

INAFI Nepal conducted research on thematic issues. Research findings shared with member organizations, MFIs and the other stakeholders including policy makers and government agencies.

Recent Activities:

• Conducted research on 'Impact of microfinance services on Poverty Reduction in Nepal'

• Conducted research on 'Microfinance Services in Insurgency and Conflict Situation: A Case Study of Nepal'

• Dissemination of the research findings.

• Documentation and publication of the research report.

Mainstreaming Gender in Microfinance

Women in Nepal are often deprived because of mainly social and legal discrimination. Gender equality is increasingly becoming the focus of government and citizen concern and a pertinent challenge for the microfinance sector around the globe. A Gender perspective in microfinance is necessary for the positive evolution of human development, which is more than just a strategy for economic development. Emphasizing the importance of a gender perspective for the success of microfinance sector, INAFI Nepal seeks to conceptualize the gender problem in Nepal. INAFI also aims to provide responses and strategies for mainstreaming gender both at the client and institutional level and to reinforce gender equality as a central concern.

INAFI Nepal's activities towards gender and microfinance focus on:

• Enhance the conceptualisation and strategy for gender mainstreaming in micro finance programs. 

• Identify key issues on gender mainstreaming in microfinance.

•  Make policy recommendations to mainstream gender in microfinance.

Recent Activities:

• Workshops on 'Gender and Microfinance: Mainstreaming Gender in Microfinance'

• Gender and microfinance topic (session) included in training package.

Address of INAFI Nepal:

INAFI Nepal

GPO 3827 SAP Falcha, Babarmahal,

Kathmandu Nepal.

Phone: +977-1-4223230, 4223050

Fax: +977-1-4241338

Email: inafinepal@sapnepal.org.np

Micro Finance Services in Insurgency and Conflict Situation:
Case Study of Nepal